Condo purchasers looking to benefit from low down payment FHA insured mortgages currently must buy in condo buildings that are FHA certified. The process of obtaining FHA certification can be time consuming and the certification must be renewed every 2 years. Many condo associations do not bother with FHA certification, which means that the pool of eligible buyers shrinks for sellers in those associations. In fact, it's estimated that fewer than 7% of condo buildings carry this certification.

FHA certification for the entire building was not a requirement prior to 2010, when stricter policies were put in place as a result of FHA losses in condo buildings from fraudulent mortgages. Until then, lenders used the "spot" loan approach to qualify FHA-insured mortgages in condo buildings that were not FHA certified as a whole.

A return to spot loans could benefit both condo buyers and sellers by increasing financing options, but lenders will still need to adequately review the condo association's financial stability, which could mean a lot of red tape.

Read more about potential changes to FHA loans for condo buyers here.

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